Disruptive Trends in Wealth Management I

How will the increasing digitisation affect the WM industry?

The increasing digitisation may initially seem like a threat to traditional wealth managers, but this is not true. While it may at first seem overwhelming, when viewed through the right lens it is an opportunity to improve the services we offer to clients and increase efficiency. From the perspective of a client or customer it is also important to understand the key trends and changes currently underway in the industry. 

What are the emerging trends that are disrupting the WM industry? 

• Open banking 
• Fintechs entering the industry
• Robo-advisory
  
• Big tech firms entering the industry
  
• Sustainable or ESG investing 

How is open banking impacting the WM industry?

Open banking allows institutions to share data across customer accounts to improve the customer experience for account holders. This represents an area that seems to be promising for the future of wealth management is the use of API’s and AI to generate client-specific product recommendations using historical data. Within the wealth management space, digital-only platforms have quickly realised the value of open banking. Wealth management firms can leverage the large amount of new data available through open banking to strengthen client understanding. The traditionally strong relationship between wealth managers and their clients can be boosted by tailor-made investment/ saving strategies.

How investment in fintechs is impacting the WM industry? 

Fintechs refer to startups and tech companies that are innovating and transforming financial services through technology. FinTechs offer highly personalised services and can speed up processes. Furthermore, they can process data efficiently to get the best view of what clients will find most valuable and therefore offer a more tailored service. This is becoming a key source of competitive advantage as it prioritises personalisation. It is now evolving into a relationship first approach vs a revenue first approach.